What are the advantages of staying On-Site?
Magical Express (i.e., transportation from the airport)
Onsite transportation
Extra Magic Hours (although if you don't have park hoppers then you're committing to the park that will be busiest all day, and if you don't like getting up early not as big a deal)
Access to the Dining Deals (there's a thread on the dining board with people figuring out how to eat on the same budget without the dining deal, and with more flexibility)
You might also post to the "Orlando Hotels and Attractions" for the advantages of staying off-site. As has been said, even a lot of off-siters in your position would prefer onsite. You're right in the "sweet spot" where staying onsite is often cheaper, but if money is a concern checking offsite options is worth doing. The only offsite place I know of with anything even
approaching the transportation services of onsite is Bonnet Creek; their schedule offers way more than my family needs, the only real "hole" is if you want to head home in the early afternoon (although some people have requested an unscheduled ride back with the guys bringing people *to* the park and gotten on with no problem). I know the hotel portion of that is finished but as a TSer I don't know much about it; if you posted to the Orlando board someone one else might.
I do know that if you stay at the Wyndham Bonnet Creek hotel you have access to all the resort pools, meaning you have the option of two lazy rivers, which is something you can't really get onsite (the "lazy river" at Storm Along Bay is short, non-scenic, and they don't supply tubes

). But if lazy rivers aren't your thing, then onsite pools are cooler than most offsite options.

And if you're going moderate, a lot of people consider the pool at Coronado Springs the best pool going, better even than Storm Along Bay!
